Depositors rush to withdraw funds from troubled banks

JAKARTA (JP): Thousands of anxious depositors rushed to withdraw their deposits Monday from the seven banks placed under the management of the Indonesian Bank Restructuring Agency (IBRA) by the government over the weekend.

Hundreds of people lined up at the headquarters of Bank Danamon on Jl. Sudirman, South Jakarta, Bank Modern on Jl. Thamrin, Central Jakarta, and Bank Umum Nasional (BUN) on Jl. Rasuna Said, South Jakarta, to withdraw their money.

The government announced Saturday that IBRA had taken over the management of Bank Danamon, Bank Dagang Nasional Indonesia (BDNI), BUN, Bank Tiara Asia, Bank PDFCI, Modern Bank and state Bank Ekspor-Impor Indonesia (Exim).

Most customers said they wanted to withdraw their money despite repeated government assurances that their deposits were totally guaranteed by the central bank.

Thousands of customers reportedly withdrew funds from Bank Danamon branches in Bandar Lampung and Tanjung Karang in Sumatra.

Hundreds of people were seen rushing into Bank Exim's branches on Jl. Raden Intan, in Tanjung Karang, and Jl. WR Supratman, Teluk Betung in Sumatra, Antara reported Monday.

"People do not trust the government anymore despite its assurances," an executive at Bank Danamon said.

BDNI and Bank Danamon branches in Aceh were also overrun by panicked customers wanting to withdraw their money.

Massive withdrawals took place at Bank Exim, BUN and Bank Danamon in Mataram in Lombok, West Nusa Tenggara.

Similar scenes occurred at Bank Danamon offices in Manado, Tomohon and Bitung in North Sulawesi where customers hurried to withdraw their deposits from both tellers and automated teller machines (ATMs).

Most customers were disappointed to find that Bank Danamon's ATMs had either run out of cash or did not work.

Mounting fears that the country's banking industry may be on the brink of collapse also caused massive withdrawals at some banks not under IBRA management.

Hundreds of depositors were seen lining up at Bank Central Asia's branch in Cakranegara, Bali, to withdraw their deposits.

IBRA vice chairman Rini M Soewandi said the government would take over the ownership of the suspended banks after they held their annual shareholder meetings next month.

Rini, who is also finance director of the country's largest automaker PT Astra International, said Monday the owners of the suspended banks would remain responsible for their banks' liabilities.

She said IBRA would evaluate the banks' assets and match them with the total liquidity credits they had received from the central bank.

"If their assets are not sufficient to repay the central bank credits, the owners of the banks will be held responsible for repaying the liquidity credits," she said.

Asked if the government should ban the owners from leaving the country, Rini said: "It's up to the Minister of Finance."

Widigdo Sukarman, the president Bank Negara Indonesia (BNI), which was assigned to repay the depositors of the suspended banks, said Monday that not all of the depositors would withdraw their money from his bank.

"We expect at least 85 percent of them will keep their deposits in new accounts at BNI," he said. (aly)